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Economics Mcqs 4423 MCQs [All-Courses]

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Economics MCQs cover fundamental concepts of microeconomics and macroeconomics, including demand and supply, inflation, national income, and economic policies.
This section is designed to strengthen analytical skills and conceptual understanding for competitive examinations.
Highly useful for PPSC, FPSC, NTS, OTS, KPPSC, and other testing services preparation.

All Topics  4423

If there is an increase in the price of apples which causes consumers to purchase fewer kilograms of apples and more kilograms of oranges, the CPI will suffer from ?
A none of these answers
B substitution bias
C base year bias
D bias due to unmeasured quality change
Correct Answer: substitution bias
Which of the following would probably cause the CPI to rise more than the GDP deflator in the Pakistan ?
A An increase in the price of BMWs produced in Germany and sold in the Pakistan
B An increase in the price of Peugeots produced in the Pakistan
C An increase in the price of helicopters purchased by the Pak Navy.
D An increased in the Price of domestically produced armoured vehicles sold exclusively to Iran
Correct Answer: An increase in the price of BMWs produced in Germany and sold in the Pakistan
Suppose the government increases its purchases by Rs16 billion. If the multiplier effect exceeds the crowding out effect, then ?
A The aggregate supply curve shifts to the right by more than Rs 16 billion
B The aggregate demand curve shifts to the left by more than Rs 16 billion
C The aggregate demand curve shifts to the right by more than Rs 16 billion
D the aggregate supply curve shifts to the left by more than Rs 16 billion
Correct Answer: The aggregate demand curve shifts to the right by more than Rs 16 billion
When an increase in government purchases raises incomes shifts money demand to the right raises the interest rate, and lowers investment we have seen a demonstration of ?
A supply-side economics
B None of these answers
C The crowding-out effect
D The multiplier effects
Correct Answer: The crowding-out effect
An increase in the marginal propensity to consumer (MPC) ?
A raises the value of the multiplier
B has no impact on the value of the multiplier?
C rarely occurs because the MPC is set by congressional legislation
D lowers the value of the multiplier
Correct Answer: raises the value of the multiplier
The initial impact of an increase in government spending is to shift ?
A aggregate demand to the right
B aggregate demand to the left
C aggregate supply to the right
D aggregate supply to the left
Correct Answer: aggregate demand to the right
The initial effect of an increase in the money supply is to ?
A increase the interest rate
B increase the price level
C decrease the price level
D decrease the interest rate
Correct Answer: increase the price level
When money demand is expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the interest rate ?
A None of these answers
B decrease the quantity demanded of money
C increase the quantity demanded of money
D decreases the demand for money
Correct Answer: decrease the quantity demanded of money
Which of the following best describes how an increase in the money supply shift the aggregate demand curve ?
A The money supply shifts right prices fall spending increases and the aggregate demand curve shifts right
B The money supply shifts right the interest rate rises investment decreases and the aggregate demand curve shifts left
C The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
D The money supply shifts right, prices rise, demand curve shifts left
Correct Answer: The money supply shifts right the interest rate falls, investment increases, and the aggregate demand curve shifts right
Which of the following statements about stabilization policy is not true ?
A Many economists prefer automatic stabilizers because they affect the economy with a shorter lag than activist stabilization policy
B None of these answers are true
C Long lags enhance the ability of policy makers to fine tune the economy
D When policy makers implement activist stabilization policies there is a significant risk that their policies may actually have a destabilizing effect
Correct Answer: Long lags enhance the ability of policy makers to fine tune the economy
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